Mitchell-Lama tenants threatened with huge rent increases because their landlords are leaving the affordable housing program got a potential lifeline at the end of last month when Mayor Bloomberg initiated a plan to encourage landlords to stay in the program for another 15 years or more.

Gerson said tenant ownership is the solution. He has introduced legislation that would give tenants in Mitchell-Lama and other affordable housing projects the right to own their buildings when they leave the subsidy programs. Gerson intends to follow the legislation, Intro. 186, with a bill to establish a $1.2 billion affordable housing fund over the next 10 years to help finance tenant ownership.

The Gerson proposal is similar to the deal that West Village Houses tenants, with the citys help, made with the landlord when their complex left Mitchell-Lama in May.

Our proposal would extend the right-of-first-refusal to tenants in all expiring affordable housing programs to form their own limited equity non-eviction co-ops, said Gerson. It would affect more than 3,000 tenants in my district alone, including Lands End 2, a Section 8 program building, as well as Lands End 1, a Mitchell-Lama development, said Gerson.

He said other affordable housing programs, including one enacted in 1937 that governs Knickerbocker Village, located between Catherine and Market Sts., could also benefit from the proposal.

At Gateway Plaza in Battery Park City, a specially negotiated agreement similar to Mitchell-Lama expires in 2005. Assembly Speaker Sheldon Silver is trying to broker an agreement with the Lefrak Organization to extend that protection until 2009. However, Gerson said his bill could give Gateway tenants a chance to own their apartments.

Our bill could also provide a safety net for Independence Plaza North if the federal government allows the vouchers to disappear, Gerson added. The I.P.N. landlord took the 1,320-unit Tribeca complex out of Mitchell-Lama and agreed to accept federal vouchers from about 800 residents who are income-eligible. However, the Bush administration has proposed restructuring the federal housing voucher program to reduce the number of tenants covered.

Gerson contended that his proposal to guarantee tenants the right-of-first-refusal to own their buildings would be successful even without spending city money if community-based organizations, labor unions and community banks stepped in to finance tenant ownership. It would give tenants a fighting chance to find their own finance services. Gerson said.

The mayors office did not respond by press time to a telephone request for comment on Gersons proposal.

Gerson said his proposed $1.2 billion affordable housing trust fund is about a third of the cost of the mayors plan to create 65,000 new units of affordable housing over the next 10 years.

Bloombergs initiative, also in two parts, is voluntary. It gives landlords the opportunity to refinance and extend their Mitchell-Lama mortgages at lower interest rates and also offers low-cost repair loans for capital improvements if they remain in the program for at least another 15 years.

The initiative is available to 53 rental and 27 co-op developments in the Mitchell-Lama program covering more than 27,000 apartments, according to a statement the mayor issued at the end of June. The initiative, administered by the Housing Development Corp., is expected to cost the city about $2,700 per unit.

Joseph Strasburg, president of the Rent Stabilization Association, representing owners of rent-stabilized residential property, called the mayors initiative a valuable incentive to stay in the program. Steven Spinola, president of the Real Estate Board of New York, also hailed the mayoral program.

Gerson, however, said the incentive program might work in places where real estate values are relatively low. But in place where you have a hot real estate market like Manhattan and Brooklyn Heights, its not going to help, he said.

Gerson said he has been discussing his tenant ownership proposal with Housing Preservation and Development Commissioner Shaun Donovan for several months. We hope to come up with a bill with administration backing, but I intend to go forward with it, with or without the administration.